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Water Rights in New
Mexico NM Real Estate Commission
Continuing Education Course
Kyle S. Harwood
Egolf + Ferlic + Day, LLC
January 22, 2015 1
Kyle S. Harwood Kyle S. Harwood is an attorney and water resources professional who, prior to
becoming of counsel to Egolf + Ferlic + Day, LLC, was owner of Harwood Consulting,
PC which provided legal and interdisciplinary water resource consulting services
through New Mexico.
Kyle has advised clients on land and water law regulation and policy issues throughout
New Mexico. He litigates these issues in courts throughout the state, and also drafts
regulations and policy for clients. He has authored numerous articles on water resource
issues and lectured on land use and water law. Kyle represents public, private and
nonprofit clients, as well as governmental clients, in water and natural resource issues,
including special master assignments and expert witness services.
Kyle received recognition as a New Mexico State Bar Board Certified Specialist in
Natural Resource Law – Water Law in 2013. Kyle was certified as an instructor for the
New Mexico Real Estate Commission in 2012 and has taught classes in water law to
hundreds of real estate professionals. Kyle is a former board member and chair of the
New Mexico State Bar Natural Resources, Environment and Energy Law (NREEL)
Section.
2
Contact Information Kyle Harwood
Egolf + Ferlic + Day, LLC
128 Grant Ave., Third Floor
Santa Fe, NM 87501
505-629-8999
kyle@egolflaw.com
https://egolflaw.com
3
Introduction How are water rights and water law relevant to real
estate transactions?
Professional and ethical considerations
Real estate disclosures and information sheets
How to be an informed consumer of legal services
How to advise real estate clients
4
Water law and real estate in
practice … “3 Legged Stool”
water supply
water infrastructure
water right
Water system types: domestic well, shared wells,
mutual domestic, private or public utility
Water use and features- domestic, irrigation, stock
ponds, acequias, springs, streams, reservoirs, cisterns
5
NM Constitution
Article XVI Irrigation and Water Right
Section 1: Existing water rights confirmed – “All existing rights to the
use of any waters in this state for any useful or beneficial purpose are
hereby recognized and confirmed.”
Section 2: Appropriation of water – “The unappropriated water of
every natural stream, perennial or torrential, within the state of New
Mexico, is hereby declared to belong to the public and to be subject to
appropriation for beneficial use, in accordance with the laws of the
state. Priority of appropriation shall give the better right.”
Section 3: Beneficial use of water – “Beneficial use shall be the basis,
the measure and the limit of the right to the use of water.”
6
Water Right Terms and
Definitions Surface water and Ground
water
Acre Foot – Acre Foot per
Year – Acre Foot per Year
per Acre
Consumptive Use vs.
Diversionary Use
Declaration, Permit, PCW,
EOT, PBU, License
7
Water Right Terms and
Definitions
Prior Appropriation, Priority,
Hydrographic Survey
Adjudication, Orders, Decrees
Domestic Well, Acequia Bylaws
Return Flow Plan
WSA (well share agreement)
WRPA (water right purchase
agreement)
8
What is a Water Right? Usufructuary Right … (no joke)
(Owner)
Point of Diversion
Place of Use
Purpose of Use
Volume (or other measure of amount)
Priority Date
($ Value)
9
What a Water Right is Not
10
Hydrology
11
Figures by USGS 12
Researching Water Rights
Office of the State Engineer
District Offices
WATERS database
OSE Adjudication Database - LAP
County Clerk
Adjudication Courts
13
"Understanding New Mexico water law is not unlike
learning statistics. It seems inscrutable at first, causing
confusion and consternation. After a while, basic rules
and principles are learned and the rest eventually falls in
place, at least for some. For others, we conclude it will
never make sense and hope we’ll never really have to
deal with it. Unlike statistics, water law questions regularly
do appear in the practice of law in New Mexico and the
frequency is likely to increase as competition for limited
supplies escalates."
– credited to Tim De Young, J.D., RIP
14
Top 10 Questions 1. Who owns the water located
on or under my property?
2. Do I have a water right?
3. Is a water right conveyed with
real estate?
4. How much is my water right
worth?
5. When is public notice
required?
15
Top 10 Questions 6. Is my well share agreement enforceable?
7. Has my water right been lost through non-use?
8. Should I file a 'Proof of Beneficial Use' or an 'Extension
of Time'?
9. Can I move my water right?
10. How many homes can share a domestic well?
11. Should I hire a water law attorney?
16
72-12-1.1. Underground waters; domestic
use
A person, firm or corporation desiring to use public underground waters described in this section for irrigation of not to exceed one acre of noncommercial trees, lawn or garden or for household or other domestic use shall make application to the state engineer for a well on a form to be prescribed by the state engineer. Upon the filing of each application describing the use applied for, the state engineer shall issue a permit to the applicant to use the underground waters applied for; provided that permits for domestic water use within municipalities shall be conditioned to require the permittee to comply with all applicable municipal ordinances enacted pursuant to Chapter 3, Article 53 NMSA 1978.
History: 1978 Comp., § 72-12-1.1, enacted by Laws 2003, ch. 298, § 2.
Application for Permit
Change of Ownership Form
17
Non- 72-12-1s
Declarations
Type of Applications
Change Purpose of Use
Change Place of Use
Change Point of Diversion
Other Considerations
Change of Ownership Form
http://donnaclairprintstore.blogspot.com
18
Well Location Data PLSS (Township, Range, Section, QQQs)
UTM NAD 1927 (feet or meters)
UTM NAD 1983 (feet or meters)
Latitude/Longitude
19
Well Share Agreements
Preamble:
1. Description of the Parties;
2. Effective Date;
3. Property Description;
4. Description of the Physical Well and OSE Permit;
5. Description of easements and conditions that will be
established;
6. Description of regulatory obligations of the shared well;
20
Well Share Agreement Terms of Agreement:
1. Ownership of the well and water right;
2. Well usage by the respective parties, amount and purpose;
3. Provisions for maintenance, operation and repair of Well;
4. Cost sharing for maintenance, operations and repair of the Well;
5. Installation and payment for electricity and well infrastructure;
6. Metering of Well and private supply lines;
7. Establishment of Well Administrator;
8. Establishment of Well Account and reserve amount;
9. Description of periodic payments to the Well Account;
21
Well Share Agreement
11. Limits on water use, individual and total;
12. Provisions for overuse of water, over-diversion from the
Well;
13. Provision for reporting meter readings to the OSE;
14. Repair of damage due to negligence;
15. Amendment in writing;
16. Termination of Agreement;
17. Notices;
18. Mediation;
19. Indemnification;
20. Attorney’s Fees;
21. Severability;
22. No waiver by non-enforcement;
23. Easements and obligations to run with the land;
24. Signatures; Acknowledgments.
22
Water Right Market and
Transfer Process Negotiations
Water Right Purchase
Agreement
Application with the OSE
Notice in the Paper
Possible Protests
Approved Transfer
Change of Ownership of the
Water Right 23
Water Right Purchase
Agreement
Preamble:
1. Description of the Parties;
2. Description of the Water Right;
Terms of Agreement:
1. Agreement to Sell and Purchase the Water Right;
2. 2. Purchase Price and Payments;
3. Representations, Covenants, and Warranties of Seller;
A. Enforceability;
B. Authority;
C. Title to the Water Right;
D. Judgments, Litigation, and Claims;
E. Compliance with Conditions Precedent;
F. No Further Sale or Assignment;
G. Cooperation. 24
Water Right Purchase Agreements
4. Representations of Buyer;
5. Termination;
6. Conditions Precedent;
A. Representations True;
B. Sellers Compliance with all Conditions by or on Closing;
C. Proof of Title of Real Property;
D. Approval of Acequia;
E. Approval of OSE;
1. If permit is not acceptable to either Buyer or Seller;
2. If permit is protested, Buyer’s options;
3. If OSE makes a determination of a invalid
water right;
4. Permit acceptable to Buyer issued by OSE
before closing;
F. Survey and Legal Description.
25
Water Right Purchase
Agreements 7. Deposit Funds and Escrow Documents with Escrow;
8. Closing;
A. Closing after Conditions Precedent met;
B. Date, Location, Settlement Statement;
9. Fees and Costs Exhibit;
10. Miscellaneous Provisions;
A. Buyer’s Authority to enter Agreement;
B. Parties’ Cooperation on Additional Documentation;
C. Indemnification;
D. Notices;
E. Applicable Notice;
F. Binding Effect of Agreement;
G. Captions;
H. Attorney’s Fees;
I. Entire Agreement;
J. Exhibits Incorporated;
K. Nature and Survival of Representations;
11. Signatures. 26
Water Quality Issues
27
Review of RANM Forms Form 2104 Residential Resale
Form 2307 Important General Information and
Disclaimer Water Rights and Domestic Wells
28
Aamodt Settlement
• Categories of Wells
• 4 Types of Domestic
Wells
• Shared Domestic
Well
• Other Wells
• “Election” Options
• Show Cause Packet
• Order
• Change of Ownership
Form
• Alerting the ALU
29
San Juan Chama Water
30
The Silvery Minnow Endangered Species Act
Minnow I
Minnow II
31
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